Aim To Free Rs 64,000 Cr Through Pending Litigations
The finance ministry expects to garner higher revenue collections through a massive exercise aimed at resolving litigation cases and freeing monies amounting to around Rs 64,000 crore.
The Budget 1998-99 is also aimed at restoring high revenue buoyancy through a widening of the personal income tax net, checking evasion and several assumptions on customs and excise collections.
Speaking at a post Budget briefing in the capital yesterday, revenue secretary N K Singh said that he expected to achieve a higher revenue buoyancy through collections from money locked up in various pending litigations - Rs 40,000 crore is locked up in the area of direct taxes in over 5 lakh litigations, Rs 12,000 crore in 1.7 lakh cases in the area of excise and customs and Rs 12,000 crore in litigations between government and public sector units.
The secretary added that a waiver on interest and penalty can be enabled and tax can be paid at the applicable rate of 30 per cent
This could raise a significant amount of revenue for the government though no credit has been taken for it in the present Budget estimates.
He also said that he was projecting an increase of 40-50 per cent in the number of income tax assessees from the current 1 crore and 6 lakh with the help of the one by six formula and the permanent account number initiatives.
He added that a 34 per cent increase in corporate tax rates is envisaged while a 22 per cent increase on personal income tax is expected.
On customs, the secretary said that imports in the year were pegged at $ 46.8 billion (see chart) with a collection rate of 27 per cent and exchange rate of Rs 40 to a dollar.
The 8 per cent duty on imports is however expected to cover only 1/3rd of total imports. The customs proposals are expected to fetch additional revenue of Rs 3304 crore.
Last year, the revised estimate of customs for 1997-98 fell short of the budget estimate of Rs 52550 crore by 22 per cent.
It is further assumed that 80 per cent of the excise collections will be through ad-valorem duties and 20 per cent through specific duties.
The excise proposals also assume a 10 per cent growth in manufacturing sector and an inflation rate of 5.5 per cent. Excise proposals are expected to result in a gain of Rs 5009 crore.